Correlation Between Agilent Technologies and Space
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Space at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Agilent Technologies and Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Space Com, you can compare the effects of market volatilities on Agilent Technologies and Space and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Agilent Technologies with a short position of Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Space.
Diversification Opportunities for Agilent Technologies and Space
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Agilent and Space is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Space Com in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Com and Agilent Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Agilent Technologies are associated (or correlated) with Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Com has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Space go up and down completely randomly.
Pair Corralation between Agilent Technologies and Space
Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the Space. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 2.47 times less risky than Space. The stock trades about -0.12 of its potential returns per unit of risk. The Space Com is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,190 in Space Com on January 26, 2024 and sell it today you would lose (40.00) from holding Space Com or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Agilent Technologies vs. Space Com
Performance |
| Timeline |
| Agilent Technologies |
| Space Com |
Agilent Technologies and Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Space
The main advantage of trading using opposite Agilent Technologies and Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Space can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Space will offset losses from the drop in Space's long position.| Agilent Technologies vs. Fonar | Agilent Technologies vs. Burning Rock BiotechLtd | Agilent Technologies vs. Sera Prognostics | Agilent Technologies vs. Psychemedics |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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